Shopping for a mortgage

[Danno]

Why was the rate not locked in 2 weeks ago at 2.50% is issue #1? So $128k @ 4.375% is/was $639.09 p&i per month. You have 276 payments left or $176,388 left over the remaining 276 months.
New loan of $110,400 at 3% over 15 years is $762.40 p&i a month for 15 years or $137,232 over the life of the loan. Looks like you will save about $39,000 over the life of the loan, so do it.
The new payment is $123.31 more than you pay now, so if you don't refi and just pay $762.40 per month the present loan would pay off in 16.73 years rather than 15 years, so ya, do it.

Except he expects to sell/move in the next 12-24 months.

[liv2ski]

Except he expects to sell/move in the next 12-24 months.

But there is no guarantee that will happen? If for sure selling in 2 years skip the refi. $108,400 X 4.375% = $4,743 a year in interest. $110,400 @ 3% is $3,312 a year, so about a 2 year breakeven on recouping the costs.

[alpinevibes]

Except he expects to sell/move in the next 12-24 months.

Yes, we have short-term moving goals, but I think the most likely timeframe for actually winning a bigger unit and being able to move is 24mo.

My intention for refinancing is not lowering my monthly payment - I'd probably still pay $800/mo once refinanced; just looking to gain more equity > interest. I guess my calculation is looking at short term equity gains vs interest paid on the current loan, and recouping the refinancing costs.

Is that even a calculation or am I way over thinking this?

[sirbumpsalot]

Yes, we have short-term moving goals, but I think the most likely timeframe for actually winning a bigger unit and being able to move is 24mo.

My intention for refinancing is not lowering my monthly payment - I'd probably still pay $800/mo once refinanced; just looking to gain more equity > interest. I guess my calculation is looking at short term equity gains vs interest paid on the current loan, and recouping the refinancing costs.

Is that even a calculation or am I way over thinking this?

Take a 30yr with credit that covers the $2400 and be done with it...continue to pay old payment to add to equity if so be it.

In the end its small money over a 12-24 month period vs the loan you are talking about to be meaningful over a lifetime.

[alpinevibes]

Take a 30yr with credit that covers the $2400 and be done with it...continue to pay old payment to add to equity if so be it.

In the end its small money over a 12-24 month period vs the loan you are talking about to be meaningful over a lifetime.

Lender had said potentially a $700 credit at 2.5% fixed 15yr against the $2500 closing costs.

Could/should I expect a better credit if I dropped back to 30yr?

[Mustonen]

What do the prognosticators here say re: rates over the next 90 days? Seems we’ll keep inching up for a while.

My ex wife, in an all too predictable cut-off-your-nose-to-spite-your-face move that is perfectly within character for her, chose to not refinance a few months ago. Doing so would have netted me a small marital lien and cleaned up my pending mortgage application and yielded significant monthly savings for her. Lose-Lose > Win-Win. It would still make sense for her, but...well..... not holding out hope.

[sirbumpsalot]

Lender had said potentially a $700 credit at 2.5% fixed 15yr against the $2500 closing costs.

Could/should I expect a better credit if I dropped back to 30yr?

Don't know....but you trade a worse rate for a credit for sure. I am just saying that over a 2yr period (if guaranteed you are moving) the difference in $$$ is gonna be noise over your lifetime to spend much time over the details.

I personally have never paid for a lower rate nor paid any closing costs for a refi and probably never will but thats just me.

[alpinevibes]

Alright, so the consensus seems to be that with a max 24mo expected moving timeline, I'm unlikely to make a big gain by refinancing at the 15yr option, and could stand to lose some money if luck turns our way in the short term?

So i'll call my lender, apologize and cancel the appraisal tomorrow?

[HellgateBasement]

Just got this offer for a 30-Yr Fixed Cash-Out Refi on my investment property. Current rate is 4.375% Property is in Denver 80210. What say the collective?

FICO Credit Score - 740 and above
Estimated Appraised Value - $335,000
Estimated Loan Amount - $201,000
Cash-out of $40,000+. Amount will be updated once we're further along in the process)
Interest Rate - 3.375%

Closing Costs
Rate Buydown - $1,954 (subject to change until rate is locked)
Lender Underwriting Fee - $1,055
Tax Services Fee - $85
Flood Cert Fee - $8
Title Fees - $900
County Recording Fees - $133

[liv2ski]

Check with Rocket Mortgage and see if they have a better price.

[bagtagley]

Doesn’t Rocket require a full application and hard pull? It’s easy to email local lenders for quotes, IME.

[sirbumpsalot]

Alright, so the consensus seems to be that with a max 24mo expected moving timeline, I'm unlikely to make a big gain by refinancing at the 15yr option, and could stand to lose some money if luck turns our way in the short term?

So i'll call my lender, apologize and cancel the appraisal tomorrow?

Like I said....why don't you look for a deal in which there is a lender credit of $2400 so that your cost is ZERO. Surely there is something better than the 4+% you have. I refied twice last year with no money out of pocket and improved my rate by 0.5% and 0.625% each time. In both cases the appraisal was waived and MY closing costs were $4100 each time covered by lender credits.

[bagtagley]

We easily talked to 20 lenders and not a single one was offering credits. Maybe regional or the fact that we had a small loan (credit is excellent), but YMMV.

[utagonian]

Like I said....why don't you look for a deal in which there is a lender credit of $2400 so that your cost is ZERO. Surely there is something better than the 4+% you have. I refied twice last year with no money out of pocket and improved my rate by 0.5% and 0.625% each time. In both cases the appraisal was waived and MY closing costs were $4100 each time covered by lender credits.

This.

Since you can get 2.5% with a $700 credit, ask you lender what they credit would be for 2.65%, for 2.75% an for 2.875%... Keep going until you get to $2400 and it is a no cost loan. Don't add the cost to the principal, get the lender to pay them in exchange for a higher rate. Also, since your timeline is short, ask him to quote a 3/1 arm and a 5/1 arm. They might be lower than the 15 yr.

[alpinevibes]

This.

Since you can get 2.5% with a $700 credit, ask you lender what they credit would be for 2.65%, for 2.75% an for 2.875%... Keep going until you get to $2400 and it is a no cost loan. Don't add the cost to the principal, get the lender to pay them in exchange for a higher rate. Also, since your timeline is short, ask him to quote a 3/1 arm and a 5/1 arm. They might be lower than the 15 yr.

Ok, I'm catching on now. Thanks boys, I'll call her up and see if we can play ball.

[fool]

Just got this offer for a 30-Yr Fixed Cash-Out Refi on my investment property. Current rate is 4.375% Property is in Denver 80210. What say the collective?

FICO Credit Score - 740 and above
Estimated Appraised Value - $335,000
Estimated Loan Amount - $201,000
Cash-out of $40,000+. Amount will be updated once we're further along in the process)
Interest Rate - 3.375%

Closing Costs
Rate Buydown - $1,954 (subject to change until rate is locked)
Lender Underwriting Fee - $1,055
Tax Services Fee - $85
Flood Cert Fee - $8
Title Fees - $900
County Recording Fees - $133

It seems a little high, but the market could have changed since Nov/Dec and I'm not sure how cash-out factors into it. FWIW, I got 2.875 for my investment property in 80829 (near CO Springs), appraisal at $350, loan amount $210, similar FICO, no cash-out.

Feel free to PM me for details/mortgage broker info. I got it from Danno and it sounds like ~5 of us have used the same guy. Easy and simple experience with a great rate.

[alpinevibes]

This.

Since you can get 2.5% with a $700 credit, ask you lender what they credit would be for 2.65%, for 2.75% an for 2.875%... Keep going until you get to $2400 and it is a no cost loan. Don't add the cost to the principal, get the lender to pay them in exchange for a higher rate. Also, since your timeline is short, ask him to quote a 3/1 arm and a 5/1 arm. They might be lower than the 15 yr.

My man!

Just locked in an ok, but not stellar rate, but with $3200 credit. We should end up with a little cash in hand, which is great for our hopeful short time frame.

[Danno]

My man!

Just locked in an ok, but not stellar rate, but with $3200 credit. We should end up with a little cash in hand, which is great for our hopeful short time frame.

Nice!

Don't forget that you will also get an escrow refund from your existing servicer, plus you will skip a payment, so even more cash in hand (assuming that you are rolling these "prepaid" expenses into the new principal balance and don't have to bring cash to closing).

[sirbumpsalot]

My man!

Just locked in an ok, but not stellar rate, but with $3200 credit. We should end up with a little cash in hand, which is great for our hopeful short time frame.

Congrats. You couldn't get something with an 1/8 lower and only ~$2400 credit? I believe the excess credit goes to ether as it can only be used against closing costs...can't go into principal reduction or escrow account items or....in your pocket.

[ex-powderbroker]

Has anyone looked into 'blend and extend' instead of refinancing? it looks like you could save some money without that much hassle depending on the lender.

[Danno]

Has anyone looked into 'blend and extend' instead of refinancing? it looks like you could save some money without that much hassle depending on the lender.

never even heard of that.

[ex-powderbroker]

shit, maybe it doesn't exist in the estados unidos. basically you agree to a new mortgage with your bank and they come up with something based on your current rate, time left, and the market rate. i guess both parties are left somewhat protected, you just look at your payments before and after and whether you think the rate they gave you is worth it or if you should pay whatever fees to refinance.

https://www.reddit.com/r/PersonalFin...nd_a_mortgage/

[alpinevibes]

Congrats. You couldn't get something with an 1/8 lower and only ~$2400 credit? I believe the excess credit goes to ether as it can only be used against closing costs...can't go into principal reduction or escrow account items or....in your pocket.

I guess I didn't ask her directly if I get any leftover money beyond closing costs, but I guess I should check.

[Danno]

you should ask for a fees worksheet to see exactly where all the money is coming and going.

[Cruiser]

Yeah, that fee worksheet is way easier to read now than it used to be. Really nice to see everything broken out.